Software Licensing and Software Asset Management Trends – What to watch for in 2018

Well, it’s hard to believe but, 2017 is behind us. Myself and the team here at Method 180 thought it would be helpful to peer into the software licensing crystal ball to give some insight to the trends we expect to see in the world of Software Licensing and Software Asset Management (SAM) as we move into 2018. Some of what I have listed is vendor specific and some of the Software Asset Management trends are more general as relates to the Software Audit and SAM space. One thing is clear, organizations from small, to the largest enterprise and public sector, are coming to the realization that having a good handle on software licensing positions and implementing Software Asset Management processes can drive down costs considerably and help mitigate potential exposure.

The Merciless Onslaught of The Software Audit.

One of the trends we are expecting to see as we move into 2018 is increased software audit activity from software vendors. Watch for software vendors that have traditionally not been active in auditing starting to develop and push forward with software license audits. Increased competition from smaller vendors and lack of innovation in newer versions of most software being released is driving a value gap which manifests itself in businesses being slower to upgrade.. These factors are creating a perfect storm of declining revenues vs wall street expectations. The fact that most software companies are publicly traded means that they need to figure out how they can close the growing revenue gap. Watch for the traditional Mega Software Licensing Vendors such as Microsoft, Oracle and IBM to continue their audit activity and considering the revenue stream that their Software license audit practices are producing year over year, don’t be surprised to see increased activity from the likes of VMware, RedHat, Symantec, Quest and others in 2018.

C.A.M. The advent of – Cloud Asset Management.

Increasing complexity around cloud offerings and determining exactly what is required vs premium features means overcharging is running rampant. We are going to see a shift from traditional software licensing schemes by vendors to consumption based models. The importance of being able to monitor in real time when cloud based applications and services are being consumed will become paramount in controlling costs. A great example of this is Microsoft’s Office 365. Even though someone is only licensed for access to a basic set of features, some premium features will also be made available at the click of a mouse. If a user is accessing those premium features, your organization is responsible for licensing them as such. Real time reporting that can tell you exactly what employees are accessing and which features are active will move the needle from traditional software asset management towards the new wild west in software licensing which will be cloud asset management.

How secure is your data in the cloud?

This isn’t a new trend but, one that will continue to see increasing scrutiny in the coming year ahead. Understanding geographically where your data is stored and what rights foreign governments have to force cloud providers to allow access to cloud data is paramount in keeping your company’s data private. It’s also important to consider what contractual rights the cloud provider themselves hold regarding accessing customer’s data in their cloud. Even if the infrastructure belongs to the likes of Amazon or Microsoft, strict limitations need to be negotiated into contracts that clearly define your organization’s right to privacy. It is not out of the realm of possibility that vendors could gain potential competitive advantage by knowing what software you are running, how your organization is using it. Watch for more encryption services and offerings to come into the market in 2018 as well as increased maturity of best practices in creating policies to protect the privacy of your cloud environment.

Upgrade or else…

As I mentioned earlier, slowing upgrade cycles is putting downward pressure on software vendor’s revenue. Many businesses just don’t see value in new releases of software and are therefore sitting tight for extended periods of time with the software licenses they already own the perpetual rights for. Watch for new releases of software from mega vendors such as Oracle and Microsoft to offer premium features and integration with other software that will only be available with the latest versions going forward. Microosft has already announced this when in 2020 if you are not running a current supported version of Office you will not be able to access the Office 365 cloud. Understanding the roadmaps that software companies have laid out and how new releases might affect access to other vendors software that have previously enjoyed a symbiotic relationship will be key into making sure that your organization isn’t being walked onto a ledge that takes the decision to upgrade out of your hands.

The perils of indirect access.

We fully expect that one of the newer buzz words around Software licensing in 2018 will be indirect access. SAP has been making headlines around the globe as they pursue large enterprise clients for licensing and compliance fees and penalties related to indirect access. As much as indirect access is an issue when discussing SAP, the occurrence of accidental access is a trend that shouldn’t be ignored. We see many organizations that are hosting applications on servers that give users unrestricted access to deploy that application or many applications. It’s so important that every company understands, if users on their network have access to applications, the organization will be held responsible for licensing all users that have access. It does not matter if the application is being launched or not. The fact that users “could” access or deploy an application from a server has become a huge compliance risk. Make it one of your resolutions for the new year to check internally and ensure that users who don’t require access to server based applications do not have the ability to access them. Use firewalls or create policies to ensure that your organization is not at risk of compromising compliance rules through either indirect access or accidental access in 2018.

Bring Your Own Device(BYOD) licensing, policies and process.

As the business world continues to evolve and control costs by having employees bring their own devices into the company’s environment, new challenges will present themselves in 2018. One of the trends that we are observing in the BYOD space is companies struggling with how to keep software that installed by a user for personal use off their networks. Most software companies do not distinguish rules between running applications off a personal device and a company managed device in their software licensing rules and use rights. If you are being audited and that software shows up in network scans, it can leave your organization open to compliance issues and steep financial implications. Avoid giving software vendors any leverage in software compliance audits by strengthening policies around BYOD. Creating containers that are installed on these managed devices to ensure that software licenses purchased by users outside your network are not able to move freely into your corporate infrastructure.

The advent of Software Asset Management (SAM) as a service.

We are all familiar with managed services. Using outside companies to provide hardware infrastructure, network monitoring services, or professional services to save money has become common place. One of the biggest trends to watch for in software licensing this coming year will be services to assist organizations with their software asset management in real time. For some years now, software vendors have been bringing tools to market claiming that discovery and inventory capabilities of their software asset management tools will save huge money. The reality of this claim is that a software inventory tool is only one pillar of what is required to really ensure compliance and drive savings from spiraling software investments.

Software asset management as a service will add two additional and absolutely required pillars to the picture. These components are people with expertise and the process on which the entire SAM concept needs to include if it is to be successful. Having experts who understand that there are many ways that a software application can be deployed and its use optimized within your environment is logic that no software inventory tool on the market can integrate. Being able to visualize and create meaningful reporting that adds value to your business is key and there really aren’t that many true experts in the workforce. Expert resources offered by SAM as a managed service adds additional benefits to vendors who license their products by Processor Value Unit (PVU). I have spoken to numerous experts in the field of IBM and Oracle licensing who back up the claim that there isn’t a tool on the market today that does a good job of inventorying software licensing that is based on PVU calculations. Setting up the processes to ensure success is the final key pillar of software asset management as a service. It goes far beyond simply making sure licenses are counted, purchased or reclaimed on an ongoing basis. It ensures that the reporting that comes from software asset management tools can be arranged in a way that business leaders can easily visualize licensing data and get real recommendations based on use, what rights your business has to use the software and how that information all fits together with technology roadmaps and upgrade cycles. Look for software asset management as a service to be a big deal as we move forward into 2018.

Method 180 are known for being pioneers in the SAM space and we have developed our own Software Asset Management as a service offering called SAM Compass. It takes data from whatever tool your organization is using for inventory, couples it with licensing expertise and our proven best practice processes. SAM Compass Software asset management as a service is the result of knowledge gained assisting organizations through software contract renewals, software audits and developing strategy to assist with the adoption of new software technologies. SAM compass will be the silver bullet that we have all been looking for as we seek savings and compliance that will finally unearth the 25-40% savings that have been promised by SAM tools. The best part about Software asset management as a service is that we see this as being a service that will fund itself with the savings organizations experience when they adopt it. You can check out SAM Compass here.

Jay Bishop has worked in the software industry for more than 15 years. Spending the better part of a decade in software specific distribution, he managed Licensing teams for multiple Enterprise System integrators. Jay has a true passion for software licensing and saving clients money on their software spend.